Chief Minister Devendra Fadnavis believes implementation of the Centre’s demonetisation policy and the Goods and Services Tax have not cast any negative spell on Maharashtra’s economy. He claims that the state has set a target to sustain the rate of gross state domestic product (GSDP) at beyond 10 per cent.
In an interview to The Indian Express, Fadnavis discussed the state’s economic scenario and challenges in the infrastructure sector. The chief minister said foreign direct investment in industrial and infrastructure sectors would boost the overall GSDP. “Maharashtra has made a giant leap in the infrastructure sector with projects worth Rs 5.96 lakh crore, which will boost the overall GSDP of the state. The industrial projects worth Rs 8 lakh crore shortlisted during the Make In India event are moving at the right pace,” said Fadnavis.
He added: “My confidence stems from ground realities, and this is not any political or populist statement. Majority of the projects, including Foxconn, which had promised investments and operations in Maharashtra have remained intact. However, in some cases there were glitches requiring interventions, causing some delay.”
Describing the last three years’ economic growth satisfactory, especially in the backdrop of serious drought, Fadnavis said, “Almost 44 per cent of the MoUs, which are signed in Maharashtra, fructify. This is the highest rate of materialisation of MoUs in the country. Even in the best times, the average rate clocked in the past did not exceed 30 per cent in the country.”
Claiming that the statistics given by Niti Aayog proved the investors’ confidence in Maharashtra had shown a remarkable rise, he said, “Of the total foreign direct investments in India, Maharashtra has bagged Rs 1.29 lakh crore. For any big project to become operational, a time period of one to eight years is expected. But that does not mean the project has been shelved.”
Admitting that borrowings have gone up and measures would be taken to bring greater fiscal prudence, the chief minister said, “It is certainly not a cause for concern. To the contrary, we have done extremely well coping with the economic reforms like GST, having registered highest tax returns in the country. In last three years, there was not a single overdraft. There is no expenditure cut enforced in any department, but greater accountability on spending has become mandatory.” While the Centre has promised five years’ compensation to all states to cope up with the GST transition, Maharashtra has almost bridged an estimated financial gap of Rs 14,000 crore this year. From next fiscal, the state might not require the Centre’s compensation, said the CM.
Fadnavis said, “The state’s debt-GSDP ratio is 16 per cent and our outer limit is 25 per cent. This means we still have adequate cushion of 9 per cent to go for higher borrowings. We have decided to bring the ratio further down, and work on models to mobilise revenue to cope with the increased expenditure in core social and agriculture sectors.” He said the government was confident of materialising all mega infrastructure projects between 2019 and 2022, adding that the government had completed the process of financial tie-ups required for all these projects.
“Work on the Nagpur-Mumbai Supercommunication Expressway (Samruddhi Corridor) will commence in January-February 2018. South Korea has committed 10 billion USD. The 250-km Metro projects across Mumbai and its satellite township have expedited. The ongoing Navi Mumbai Airport, Pune and Nagpur airports have made good progress,” said the CM.